Rapid Fire July 18, 2012: Stuck in a Rut

The Aerospace Industries Association (AIA) outdid its previous report on the effect of sequestration on jobs with a new one [PDF] that predicts even uglier outcomes for the whole US economy. The scary numbers are conveniently laid out by state for maximum political impact. An interesting new twist to try and broaden opposition to sequestration beyond defense: “Non-DOD cutbacks would have a much greater direct impact on federal employment than DOD budget reductions due to the respective differences in procurement and payroll distributions.” At this rate a 3rd report threatening a loss of 3 million jobs should be made available just in time for the lame duck session in November.

That very same topic is on the agenda of the House Armed Services Committee with a hearing today where the bosses of Lockheed Martin, EADS NA, Pratt and Whitney, and Williams-Pyro (to bring a small business perspective) testify.

An interesting question is what would happen to contracts funded between the start of FY13 (i.e. Oct. 1, 2012) and the beginning of sequestration (Jan. 2013). According to Press Secretary George Little:

“Sequestration cuts would not affect current contracts funded with FY12 dollars that is obligated funds. Anything put on contract between now and September 30th, the end of the fiscal year, would also not be affected or be subject to sequestration. All FY13 dollars would, however, be subject to sequestration.”

“[W]e are focusing our efforts in the near term on the re-write of the U.S. Munitions List, or USML, and the Commerce Control List, or CCL, to create clear bright lines between munitions and dual-use items. Our work is focused now on the removal of the majority of parts and components from the USML to the CCL in these categories.”

There are a lot of milestones to be reached for the US DoD to be finally fully auditable. The Defense Logistics Agency is now able to prove that that when the it receives appropriated funding from the Pentagon, it is distributed to DLA organizations accurately and effectively. It has three other “waves” to go through, and that’s just one agency.